In a video for the Bloomberg Markets Most Influential Summit 2015, Jack Liu, Head of International at OKcoin and former Kraken director of strategy, spoke to Angie Lau on “First Up” regarding Bitcoin in China, and as an alternative payment system.
Liu starts things off in 2013, when bitcoin experienced the largest rise in price, to over $1000. Since then bitcoin has dropped in price quite significantly, currently sitting at $245.
“Underneath all that you see a pickup in venture investments,” said Liu.”It is actually been a good thing that price has come down, so entrepreneurs can focus on solving consumer problems.”
Lau then asked why so many investors are flocking to Bitcoin, even when the price has depreciated by so much. In traditional markets, it is unusual to witness such an inverse proportion of price and people; when a commodity has fallen by this much in value, usually people have lost interest and have moved onto something else.
Liu explained that the increased interest in Bitcoin despite the enormous drop in value is not because of Bitcoin itself, but rather the underlying technology: the blockchain.
As Liu explained, “… for the first time in finance, any two people can make a transaction with each other, free and instant, and without trusting the other party. That has a lot of implications, and you’re seeing this year banks being interested in technology, working with startups to work on a more open financial system.”
This is a trend that has become apparent in recent months, exemplified by banks’s interest in permissioned blockchains and the R3 distributed ledger project.
In the span of 5 minutes, numerous bitcoin topics are discussed, from the CTFC classifying Bitcoin as a commodity, to the future of Bitcoin, to a brief discussion of OkCoin’s “superwallet”, known as OKLink. Thanks to Bitcoin, OKLink would easily allow someone to receive the benefits of Bitcoin (such as quickly sending payments across continents) while holding their funds in a more “comfortable currency.”
With China leading the international Bitcoin scene in both terms of hashrate (BTCChina’s pool alone is responsible for 14% of the global hashrate) as well as exchange liquidity (80% of bitcoin transactions occur in yuan); anything that occurs in China can quite easily cause a network effect on Bitcoin in other regions.